03/03/2026
A Timely Reminder on Substantiation as ART Rejects $61K in WorkāRelated Expense Claims
The Administrative Review Tribunal (ART) has recently affirmed the ATOās decision to deny over $61,000 in workārelated expense deductions claimed by a taxpayer, highlighting how critical proper evidence is when lodging returns.
The taxpayer, an engineer working partly from home, claimed a range of deductionsāincluding car, travel, clothing, and home office expenses. The ART disallowed many of these due to inadequate substantiation.
Key issues included:
š Car expenses:
Logbooks were not kept contemporaneously and didnāt match independent records such as vehicle service documentation.
š Travel expenses:
Claims for taxi and rideshare trips lacked essential details (dates, times, destinations), and the taxpayer could not clearly distinguish reimbursed from unreimbursed travel.
š Home office expenses:
Only estimated businessāuse percentages were provided, without evidence of the actual utility costs. The ART also found the apportionment method neither fair nor reasonable.
š” Takeaway for taxpayers:
Workārelated expenses are only deductible when you can clearly demonstrate both eligibility and substantiation. Estimates without documentation are unlikely to withstand ATO scrutiny.
If you or your team need guidance on recordākeeping or ensuring your deductions meet compliance standards, our firm is here to support you.
